The Government has published for consultation a package of reforms aimed at simplifying and speeding up the process of ending the employment relationship when it breaks down. This includes:

• a consultation on how settlement agreements, a simplified form of compromise agreement for use when employers wish to negotiate a termination package with an employee without there being any dispute between them, will work in practice; and
• a consultation that will examine the potential for reducing the compensation cap, currently set at £72,300, in unfair dismissal cases. The two proposals are a cap of up to 12 months’ pay and a new, reduced, upper limit.

The closing date for responses is 23 November 2012.



Also, the Government will not be taking forward the proposal on ‘no fault’ dismissal, but will work with the Advisory, Conciliation and Arbitration Service to make the guidance to their code of practice on discipline and grievance more accessible, especially for small businesses.